Trade Policies from Down Under: A Good Example for the United States

With the World Trade Organization’s Doha Round of trade talks at a standstill, Australian Prime Minister Julia Gillard is taking action by giving poor nations “ongoing and absolute access to 100 per cent of [Australia’s] trade markets.” The United States should follow in Australia’s footsteps by removing all barriers to imports from poor nations.

According to Gillard, “Economic growth and trade is the surest way out of poverty, the surest way to create jobs and spread growth.” Poor countries have had free access to Australia’s market since 2003 with no tariffs or quotas. Gillard wants to see other countries eliminate import taxes and other barriers imposed on goods from poor nations.

The United States and poorer countries would benefit from this type of American trade policy. Data demonstrates that countries with more free trade have stronger economies, reduced poverty levels, and less inequality.

According to GlobalWorks Foundation, U.S. trade barriers hurt not only poor people in other countries but also poor Americans. U.S. tariffs are usually low on luxury goods but relatively high on low-end goods. For example, tariffs on cotton shirts are as high as 19.7 percent, and up to 32 percent on polyester shirts. These import taxes hurt low-income and middle-income families the most.

Some products from poor countries are exempt from U.S. tariffs through programs like the Generalized System of Preferences. It would be even better for the United States to abolish all barriers to imports from these countries, as Australia has done. Removing import taxes and other barriers to trade would spur further economic growth and help the poor. In the words of Prime Minister Gillard, removing barriers to goods from poor countries would encourage “[a] world of peace and order among nations and a world of liberty for people.”

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